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Government and Economy
 Fair trade: Consumers in
industrialized countries voluntarily pay
above-market prices for certain foods
so farm workers can receive higher wages
 Cultural relativism: Comparing farm
work in developing countries to
other jobs available to those workers
Government and Economy
 Economic system: social institution
through which goods and services are produced,
distributed, and consumed
 Political system: social institution founded
on a recognized set of procedures for implementing
and achieving society’s goals
Economic Systems
 Industrial society:
Society that depends
on mechanization
to produce its
goods and services
 Capitalism
 Socialism
Capitalism
 Capitalism: Economic system
in which means of production
are held largely in private hands
 Main incentive for economic
activity is accumulation of profits
 Laissez-faire: Businesses compete
with minimal government intervention
 Monopoly: Exists when a
single firm controls the market
Socialism
 Socialism: Means of
production and distribution
owned collectively rather
than privately owned
 Communism: Economic system under
which all property is communally owned
and no social distinctions are made on
the basis of people’s ability to produce
The Informal Economy
 Informal economy: Transfer
of money, goods, or services
is not reported to the government
 Difficult to measure
 In developing nations, informal economy represents
40% to 60% and often
unmeasured part of total economic activity
Table 14-1: Characteristics of the Three Major Economic Systems
Case Study: Capitalism in China
 China expected to become
world’s largest economy by 2020
 Chinese more interested in
acquiring latest consumer goods
 Communist Party officials’ decision to
open China’s economy to capitalism
reduced omnipotent institution’s influence
Case Study: Capitalism in China
 The Road to Capitalism
 Communist party assumed control
of China in 1949, outlawing profit-making
 By 1960s, China’s economy
dominated by state-controlled enterprises
 In 1980s government eased
restrictions on private enterprise
 By mid-1990s party officials began to
give businesses to private entrepreneurs
The Chinese Economy Today
 The Chinese Economy Today
 Growing free-market economy brought
significant inequality to Chinese workers
 Chinese capitalists now have to
compete with multinational corporations

By 2009, the Chinese were buying more
automobiles than people were buying in U.S.
Chinese Workers in the New
Economy
 Chinese Workers in the New Economy
 Loosening state control led to rise in job
mobility, increased opportunity, and
prosperity for family-owned businesses



Struggles include a lag between urban and
rural salaries and worker safety, and pollution
Many middle-aged urban workers lost
jobs to rural migrants seeking higher wages
With growth of a middle class, many Chinese
seek same opportunities as Western workers
Power and Authority
 Political system: social institution
responsible for implementing
and achieving society’s goals
 Interacts closely with economic
system: social institution thorough
which goods and services are
produced, distributed, and consumed
 Politics: “who gets what,
when, and how” (Lasswell)
Power and Authority
 One cultural universal is the
exercise of power and authority
 Politics: “who gets what, when, and how” (Lasswell)
 Sociologists concerned with social
interactions among individuals and
groups and their impact on the
larger political and economic order
Power
 Power: ability to exercise
one’s will over others (Weber)
 Sources of power in political systems



Force: actual or threatened use of coercion to impose one’s
political dissidents
Influence: exercise of power
through process of persuasion
Authority: institutionalized power recognized by the people
over who it is exercised
Types of Authority
 Three ideal types of authority (Weber)
 Traditional authority: legitimate power conferred by
custom and accepted practice
 Rational-legal authority:
power made legitimate by law
 Charismatic authority: power made legitimate by
leader’s exceptional personal
or emotional appeal to his or her followers

Charismatic leaders often become well
known by breaking with established institutions
Types of Government
 Monarchy: Form of
government headed
by a single member
of a royal family
 Oligarchy: Form of
government in which
a few individuals rule
Types of Government
 Dictatorship and Totalitarianism
 Dictatorship: Government in
which one person has nearly
total power to make and enforce laws
 Totalitarianism: Involves virtually complete
government control and surveillance over all aspects of a
society’s social and political life
Types of Government
 Democracy: Government by the people
 Representative democracy:
Elected members of
legislatures make laws

U.S. is representative
democracy, but critics
have questioned
whether our democracy
is representative
Political Behavior in the United
States
 Participation and Apathy
 In U.S., only small minority of citizens, often
from higher social classes, participate in
political organizations on local or national level
 By 2008 election voter turnout
was only 62% of eligible voters
 In 2010 general election,
turnout fell below 42 percent

Political participation makes
government accountable to voters
Race and Gender in Politics
 In U.S., political strength is lacking
in such marginalized groups as
women and racial and ethnic minorities
 Progress toward inclusion of minority
groups in government has been slow
 Female politicians enjoying more electoral success but
evidence that media cover them differently
Research Today
14-1: Sovereignty in the Aloha State
 From a mainstream point of view, what
might be the advantages and disadvantages
of extending sovereignty to an indigenous group?
Discuss using sociological concepts.
 Do some research on the legal basis for
tribal sovereignty. How did American Indian tribes
gain the status of separate nations?
Research Today
14-2: Why Don’t More Young People Vote?
 How often do you vote? If you do not
vote, what accounts for your apathy?
Are you too busy to register? Are
community issues uninteresting to you?
 Do you think voter apathy is a serious
social problem? What might be
done to increase voter participation
in your age group and community?
Power Elite Models
 Elite model: society ruled by small
group of individuals who share common
set of political and economic interests
 Mills’ Model
 Power elite: Small ruling elite of military, industrial,
and governmental leaders


Power elite includes relatively few members
and operates as a self-conscious, cohesive unit
Current research on global power elite on-going
War
 3 sociological approaches
 Global view studies how and why nations
become engaged in military conflict
 Nation-state view stresses
interaction of internal political,
socioeconomic, and cultural forces
 Micro point of view focuses on social
impact on individuals and their group
Peace
 Peace: Absence of war and
proactive effort to develop
cooperative relations among nations
 Global Peace Index: U.S.
ranked 97 on list of 121 nations
 Since 1990s, 90% of armed
conflicts occurred within states
 Nations cannot maintain security
through threatening violence
Terrorism
 Terrorism: Use or threat of
violence against random or symbolic
targets in pursuit of political aims
 Hope to intimidate society and
bring about a new political order
 Essential aspect of contemporary
terrorism involves use of the media
 Governments becoming concerned
about malicious cyberattacks
The Changing Face
of the Workforce
 U.S. workforce is constantly changing
 Sociologists and labor specialists
foresee workforce increasingly composed
of women and racial and ethnic minorities

52% of new workers expected
to be women from 1988 to 2018
 More diverse workforce means
relationships between workers more likely
to cross gender, racial, and ethnic lines
Deindustrialization
 Deindustrialization: systematic,
widespread withdrawal of investment
in basic aspects of productivity
 Can take the form of corporate restructuring
 Downsizing: reductions in a company’s
workforce as part of deindustrialization
 Social costs cannot be overemphasized
Offshoring
 Offshoring: transferring
work to foreign contractors
 Latest tactic in raising profits by reducing costs
 Conflict theorists: this aspect of
globalization furthers social inequality
Research Today
14-3: Affirmative Action
 Is affirmative action part of the admissions policy at
the college or university you
attend? If so, do you think the policy
has helped to level the playing field?
 What percentage of the class supports affirmative
action in hiring and college admissions? How does
that group break down in terms of gender, race, and
ethnicity?
Microfinancing
 Looking at the Issue
 Microfinancing: lending small sums of money to poor
so they can work their way out of poverty
 Developed by Muhammad Yunus in Bangladesh


Idea has been underwritten by over a thousand
for-profit banks and multinational organizations
Some lenders are taking advantage of the poor
Microfinancing
 Applying Sociology
 Poor people can significantly improve their
circumstances through mutual support (Collins)
 90% of microcredit recipients are women

Women’s economic status critical to well-being
of children and a healthy household environment
 Critics: creation of small home-based
industries reduces the demand for
formal employment opportunities
Microfinancing
 Initiating Policy
 Need to reduce overlending and
monitor the success of small loans
in helping borrowers to escape poverty
 Lenders need to work with political leaders to ensure
that they do not regard one another as competitors for
political support from the poor

Development of this type of
government policy a major undertaking